Virgin channels for sale?
March 5, 2008
Newspapers in the UK are speculating that Virgin will try and sell its TV channels and its half stake in UKTV. The forecast is based on the company's declared preferred strategy of focussing on marketing its broadband and VOD services.
If true it would mark yet another strategic change for Virgin â€“ the company that emerged from the merger of ntl and Telewest. At the time of the merger ntl's lukewarm attitude to content almost ruined the deal as it believed Telewest was placing an unrealistic value on its TV channels. ntl demanded an auction to try and extract a value but the merged company kept the business when bids came nowhere near the £800 million (E1.11bn) asking price.
Performance of some of the channels in the old Flextech group has improved but others remain marginal. However, most scepticism on value centres on the fact the BBC has change of control rights on the JV that is at the heart of the business.
There would be plenty of bidders for an auction: Sky, RTL, Turner, NBC. and the BBC could use its leverage to get a good deal; it is said it demanded E140 million not exercise its rights in the context of the previous auction.